Lake Hills [2006] QBCCMCmr 304 (14 June 2006)

Last Updated: 19 December 2006

REFERENCE: 0320A-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26051
Name of Scheme:	Lake Hills
Address of Scheme:	117 - 139 Palm Meadows Drive CARRARA QLD 4211

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

R Staley, a co-owner of lot 38

I hereby order that the application for an order to invalidate all resolutions relating to the installation of bore on common property at Lake Hills until they are considered at a general meeting. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0320-2006

"Lake Hills" CTS 26051

Application

The applicant lot owner, Mr Staley, is seeking the following order of an adjudicator:

To invalidate all resolutions relating to the installation of bore on common property at Lake Hills until they are considered at a general meeting.

Scheme

The scheme is a subdivision of 96 lots and the regulation module applying to the scheme is the Accommodation Module.

Background

The applicant advises that at a committee meeting held on 13 April 2006 the body corporate committee voted to drill for ground water for the purpose of watering common property gardens.

The committee resolutions read as follows:

1. that the committee is to obtain a second opinion from a water diviner confirming the advice received from the first water diviner who was engaged by the committee;
2. that subject to the advice received from the water diviner, the committee is to be authorised to approve the quotation received from Drill Power Qld. Pty. Ltd. on 29 March 2006 and the committee is to advise Drill Power Qld. Pty. Ltd. To proceed with the drilling of a test bore in Lake Hills; and
3. That if water is found, the bore is to be capped and the committee is to consider at future committee meetings the viable options available for the distribution of this water onto the common property gardens and lawns and these options are to be submitted for the consideration of the owners at a general meeting.

The applicant submits that :

• The legislation provides that if a series of proposals forms a single project, the cost of carrying out any one of the proposals to be taken to be more than the committee spending limit if the cost of the project as a whole, is more than the relevant limit;
• Expenditure to install a bore must only be authorised by special resolution at a general meeting ;
• Research of all viable options and total cost for each must be accomplished prior to installing a test bore.

Submissions
Under section 243 of the Body Corporate and Community Management Act 1997 (the Act), a copy of the application was provided to the respondent body corporate and to all owners, with an invitation to respond to the matters raised in the application. Written submissions were made by two owners and the body corporate.

Two owners believed that the decision to undertake drilling should be made by resolution of a general meeting rather than by the committee.


The body corporate made the following submissions:

• Advice was received from the body corporate manager that it was within the power of the committee to engage a contractor to undertake exploratory work and if water is found the bore could be capped until installation of a bore is approved at a general meeting;
• The committee regard the drilling of a test bore as necessary to determine the feasibility of the water supply available;
• The contractor who has provided the most acceptable quote has sunk productive bores in close proximity to the proposed site. For example a productive bore has been sunk 500 metres away from the test site;
• Quotations for sinking a test hole range from $14 per foot (30cm) to $16.50 per foot (30cm);
• If water was found, the hole would be cased at a total cost of $28 per foot (30cm) to
• Other alternatives were being considered such as lake water and rainwater collection;
• In any case the total expenditure for drilling the bore and installation of an irrigation system could well be within the committee’s expenditure limit i.e. $125 per lot x 96 lots = $12,000;
• under no circumstances would any further work be carried out if water was found until it was considered by the owners at a general meeting; and
• even if the total expenditure for drilling the bore and installation of an irrigation system was within the committee’s expenditure limit, a general meeting would be required as there is no provision in the sinking fund budget and a special levy would be required to raise such monies.

Jurisdiction

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Determination

The committee has engaged a contractor to undertake drilling to determine the feasibility of supplying an alternative source of water. The proposed site of the bore hole is in close proximity to existing productive bores, including a bore providing situated 500 metres from the test site, and it is anticipated that water would be found at less than 100 feet (30 metres).

Quotations for sinking a test hole range from $14 to $16.50 per foot (30cm) and if water is found, the hole would be cased at a total cost of $28 to $33 per foot (30cm). The hole would then be capped and no further work would be carried out until the proposal to install a pump and reticulation system was considered by the owners at a general meeting.

Section 101 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 regulates the expenditure of body corporate funds. Under that section, the Committee can only approve expenditure up to the relevant limit for committee spending.
The term "relevant limit for committee spending" is defined in the Dictionary section of the Act as an amount worked out by multiplying the number of lots by $125. As this scheme consists of 96 lots, the relevant limit for committee spending is $12,000 ($125 per lot x 96 lots = $12,000). Where a proposal involves expenditure above that amount it must be authorised by ordinary resolution of the Body Corporate.

In my view, the committee is entitled to engage a contractor to undertake the proposed work i.e. to
conduct drilling to determine the feasibility of supplying an alternative source of water. As pointed out, the committee would be entitled to incur expenditure of up to $12,000 although the actual cost of drilling test hole/s would probably be much less. Further, given that there are a number of productive groundwater bores in the area, I do not believe that the proposal is unreasonable, particularly when one considers the cost of reticulated water and the future availability of reticulated water for garden purposes.

Accordingly, I have decided to dismiss the application.

Although the applicant has sought interim relief, this order is to have effect as a final order.